IOL Chemicals & Pharmaceuticals Ltd (IOLCP) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day, and welcome to IOL Chemicals and Pharmaceuticals Limited Q2 and H1 FY27 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing "*" then "0" on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vaibhav Vijayvargia from MUFG Investor Relations. Thank you, and over to you, sir.
Vaibhav Vijayvargia (MUFG Investor Relations): Thank you, Hilda. Good morning, everyone, and welcome to Q2 and H1 '27 earnings call of IOL Chemicals and Pharmaceuticals Limited. Joining us today are Mr. Pardeep Kumar Khanna, who is the Chief Financial Officer; Mr. Abhay Raj Singh, who is Senior Vice President and Company Secretary; Mr. Kushal Kumar Rana, Director, Works; and Mr. Rakesh Mahajan, who is the Financial Adviser and Strategic Head, to provide the results overview recently announced by the company. Before we begin the call, I would like to give a short disclaimer. This call may contain some of the forward-looking statements which are completely based upon our beliefs and expectations as of today. These statements are not a guarantee of our future performance and involve unforeseen risks and uncertainties. With this, I would now like to hand over the call to Mr. Abhay, sir, for his opening remarks. Over to you, sir. Thank you.
Abhay Raj Singh (IOL Chemicals and Pharmaceuticals Limited): Thank you, Vaibhav. Good morning, everyone, and welcome to the Q2 and H1 FY '27 earnings conference call of IOL Chemicals and Pharmaceuticals Limited. Thank you for joining us today and for your continued trust and support. I hope you have had an opportunity to review our financial results and investor presentation filed with the stock exchanges and available on our website. We have maintained the positive momentum during the second quarter of FY '27, delivering healthy growth across our businesses, accompanied by a meaningful improvement in profitability. This performance is particularly encouraging in the backdrop of continued geopolitical uncertainties, global supply chain disruptions and volatility in raw material prices. It reflects the benefit of our continued focus on product mix, operational efficiencies, better capacity utilization and disciplined execution of our business strategy. Coming to our pharmaceuticals business, we continue to witness encouraging demand across our product portfolio. Our non-Ibuprofen portfolio maintained its growth momentum, registering approximately 70% YoY revenue growth during Q2 and contributing 45% of pharmaceutical revenue, compared with 38% in the corresponding quarter last year. This reflects the increasing scale and contributions of our diversified API portfolio. At the same time, Ibuprofen continues to remain an important business for IOL, and we remain focused on strengthening our competitive position through capacity expansion, backward integration and process efficiencies. Our chemicals business also witnessed a significant improvement in performance, with its contribution to overall EBIT increasing to approximately 7% during Q2, compared
Abhay Raj Singh (IOL Chemicals and Pharmaceuticals Limited): around 1% in the corresponding quarter last year. This improvement reflects better realization, operating efficiencies, and disciplined procurement. We believe our integrated manufacturing capabilities and investments in capacity enhancements will further strengthen this business and support its contribution to the company's overall performance. On the regulatory front, we achieved important milestone during the quarter. We received Certificate of Suitability from EDQM for Fenofibrate Process II, taking our total CEP approvals to 22. Additionally, we received a GMP certification for our formulation CDMO facility, further strengthening our regulatory credentials and manufacturing capabilities. During the quarter, we also secured EU REACH registrations for our Triacetin, strengthening our ability to access international markets. These developments represent important steps towards expanding our regulated market presence, enhancing our manufacturing capabilities, and creating opportunities for sustainable growth across our pharmaceutical and specialty chemical portfolio. Moving to our strategic growth initiatives, during the quarter, we announced three significant manufacturing projects, involving a combined investment of approximately 500 crore to be funded through internal accruals. These projects represent an important step in strengthening our manufacturing platform and broadening our business portfolio. The initiatives include the expansion of our Ibuprofen manufacturing capacity from 12,000 MTPA to 18,000 MTPA through a backward integrated facility, establishment of a formulation CDMO facility with an annual capacity of 1,500 million tablets or equivalent direct compressible grade volume, and setting up a dedicated specialty chemical facility under a long-term tolling arrangement with a leading global chemical company. These investments are aligned with our long-term objective of building scale, strengthening integration, and creating additional growth avenues. The CDMO and specialty chemical projects are expected to commence commercial operations during FY '27, while the Ibuprofen expansion is targeted for commissioning in FY '28. Our CDMO initiative will enable us to leverage our existing pharmaceutical manufacturing and process capabilities to participate in a broader range of customer requirements. Similarly, the specialty chemical projects is aimed at establishing our presence in contract manufacturing, providing an opportunity to develop long-term engagements with global customers and create an additional avenue for growth. Together, these initiatives will broaden our revenue streams and strengthen our position across the pharmaceutical and specialty chemicals value chain. Looking ahead, our priorities remain focused on executing the announced capital projects, scaling our diversified API portfolio, improving operating efficiencies, and strengthening our presence in international markets. We will continue to pursue growth opportunities with a disciplined approach to capital allocation while maintaining a strong focus on operational excellence and financial performance. The progress achieved during the first half of FY '27 reinforces our confidence in the directions of our business and our long-term growth strategy. Going forward, we remain focused on strengthening our capabilities, expanding our business portfolio, and executing our strategic initiatives with discipline, while continuing to create sustainable value for all stakeholders. With that, I would now request Mr. Pardeep Khanna, our CFO, to take you through the financial performance for Q2 and H1 FY '27. Thank you.
Pardeep Kumar Khanna (IOL Chemicals and Pharmaceuticals Limited): Thank you, Mr. Abhay. Good morning, everyone. I will now take you through the financial performance of the company for the second quarter and first half year of financial year '27.
Moderator: Sir, can you please come closer to the device?
Pardeep Kumar Khanna (IOL Chemicals and Pharmaceuticals Limited): During second quarter of financial year '27, our revenue from operations stood at INR 795 crore, registering a growth of approximately 40% Y-o-Y and 5% sequentially. For first half year of financial year '27, revenue from operations increased by approximately 39% Y-o-Y to 1551
Pardeep Kumar Khanna (IOL Chemicals and Pharmaceuticals Limited): Yeah. This growth was supported by healthy demand across our pharmaceuticals and chemicals businesses along with an improving product mix. On the operating front, EBITDA for second quarter stood at approximately 115 CR compared with 64 CR in second quarter of financial year '26, registering a growth of nearly 80% year-on-year basis. EBITDA margin improved by 321 basis point to 14.4%, compared with 11.2% in corresponding quarter last year. For first half year of financial year '27, EBITDA increased by approximately 70 % Y-o-Y to 227 CR with an EBITDA margin of 14.5% compared with 11.8% in first half year of financial year '26. Coming to profitability, profit after tax for second quarter of financial year '27 stood at approximately rupees 65 CR compared with rupees 30 CR in quarter two of the last year, registering a growth of about approximately 117 %. For first half of financial year '27, PAT increased to approximately rupees 130 CR compared with 64 CR in the corresponding period of last year, more than doubling Y-o-Y basis. On the cost front, finance cost increased during the quarter compared with the corresponding period last year, primarily due to higher working capital utilization to support increased business operations and volumes. From a segment perspective, the pharmaceutical business continue to be key contributor to overall performance, while the chemical business witnessed a meaningful improvement in the operating profitability. Exports contributed approximately 28% of revenue during the first half of financial year '27, reflecting the continued contribution of our international business. As we move to the second half of the financial year, our focus will remain on improving profitability, optimizing working capital and maintaining financial discipline. With this, we can now open the floor for questions and answers. Thank you.
Moderator: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press * and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press * and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Bhavika Singhvi from Niveshay. Please proceed.
Bhavika Singhvi (Niveshay): Hello, am I audible?
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